Congress Doubles Up, Extends Student Loan Subsidies While Funding Transportation Programs

As we mentioned the other day, the clock was ticking on Congress to agree on an extension to subsidies that would keep interest rates from doubling on federal Stafford student loans, and that this agreement would likely be tied to a bill recertifying lawmakers’ authority to spend money on federal transport initiatives. Well, with a vote of 373-52 in Congress and 74-19 in the Senate, that bundle of legislation is now headed to the White House.

The measure will keep interest rates on Stafford loans at 3.4%. They had been scheduled to double to 6.8% on July 1 with the expiration of a bill that had gradually stepped the interest rates down during the last five years.

“Millions of students are struggling to afford college and face the prospect of graduating with a mountain of debt,” explains Suzanne Martindale, staff attorney for Consumers Union. “The last thing they need is for interest rates to double on student loans. This agreement offers some much needed relief to students who are working hard to pay for the education they need to succeed. Senate leaders deserve credit for finding a bipartisan solution to keep these student loan interest rates low.”

The passing of the transportation portion of the bill means that lawmakers can continue to fund federal highways and other transit programs without interruption. It also includes a number of auto safety initiatives:

*The bill provides grants for states that pass and enforce anti-distracted driving laws and graduated drivers’ licensing laws for teenagers.
* It prioritizes new safety standards for child car seats and new research into emerging child safety concerns
* The bill sets new standards to make vehicle recalls more effective, allowing the National Highway Traffic Safety Administration (NHTSA) to require automakers to send additional notifications if NHTSA determines that the consumer response to the initial alerts was inadequate.

“There was a long debate over whether to include safety measures in this bill, and we’re really pleased that Congress chose to make safety a priority,” Ioana Rusu, regulatory counsel for Consumers Union, tells Consumerist. “These provisions will go a long way to make our roads safer.”

She adds, “Too many drivers are paying more attention to their phones than the road, and these measures will definitely help curb distracted driving. We’ve found that one of the best ways to prevent teens from texting behind the wheel is to educate them about the fatal risks, and this bill will help bring that message home.”